The Department for Work and Pensions (DWP) has confirmed that the government will not bring forward the date the state pension (SPA) age will rise to 67, although a further review is expected within two years of the next parliament to reconsider the rise to age 68.

The SPA is currently 66, with two further increases already set out in legislation: A gradual rise to 67 for those born on or after April 1960; and a gradual rise to 68 between 2044 and 2046 for those born on or after April 1977.

A review of the SPA was launched in late 2021, and aimed to consider whether the increase to age 68 should be brought forward to 2037-39 before tabling any changes to legislation, as recommended by the government's first review in 2017.

However, Secretary of State for Work and Pensions, Mel Stride, confirmed today (30 March) that it is "not the right time” to make the change, with a further review expected within two years of the next parliament to reconsider the rise to age 68.

This means that the stage pension age will rise to 67 as planned between 2026-2028.

Commenting in the House of Commons, Stride said that the independent report on the state pension age from Baroness Neville-Rolfe identified an "important challenge: A growing pensioner age population and the affordability and fiscal sustainability of the state pension".

He continued: "I want to make sure the state pension in this country continues to be the foundation in retirement for future generation whilst also being sustainable and fair.

"As a society, we should celebrate improvements in life expectancy, which has risen rapidly over the past century and is projected to continue to increase since the first state pension age review was undertaken in 2017.

"However, the increase in life expectancy has slowed. Life expectancy is still projected to improve over time, but compared to the last state pension review, these improvements are expected to be achieved at a slower rate.

"Having given regard to the relevant factors, I agree with the independent reports conclusion that the planned rise in the state pension age from 66 to 67 should occur between 2026 and 2028."

However, the government disagreed with the independent review in some areas.

In particular, Stride noted that Rolfe's independent report recommended that the rise from 67 to 68 should take place between 2041 and 2043, four years later than the 2037-39 dates proposed by the first independent reviewer in 2017.

However, he pointed out that Rolfe was not able to take into account the long-term impact of recent significant external challenges, including the pandemic and global inflation caused by the illegal war in Ukraine.

"Given the level of uncertainty about the data on life expectancy, labour markets and the public finances, and the significance of these decisions on the lives of millions of people, I am mindful that a different decision might be more appropriate once these factors are clearer," Stride continued.

"I therefore plan for a further review to be undertaken within two years of the next Parliament to consider the rise to age 68 again.

"This will ensure that the government is able to consider the latest information, including life expectancy and population projections that reflect the findings of the 2021 census data, the latest demographic trends and the current economic situation."

However, the government emphasised that it remains committed to the principle of providing 10 years notice of changes to state pension age, in order to enable people to plan effectively for retirement.

Given this, Stride confirmed that all options for the rise to the state pension age from 67 to 68 that meet the 10 years notice period will be in scope at the next review.

Commenting on the news, AJ Bell head of retirement policy, Tom Selby, argued that the delay comes as no surprise, "given we have literally seen rioting on the streets in France in response to a proposed rise in the state pension age".

“With less than two years to go until the general election, hiking the state pension age faster would likely have been political suicide for the Conservatives, who are already trailing Labour in the polls," he continued.

“The decision will come as a huge relief to people in their late 40s and early 50s who could potentially have been forced to wait an extra 12 months to receive their state pension as a result."

This was echoed by Aegon pensions director, Steven Cameron, who said that the confirmation means that "millions will be able to plan their retirement with greater certainty", and will be a relief to many nearer retirement who may simply feel unable to work into their late 60s.

However, Cameron noted that the state pension age is still due to increase to 68 by 2043 with the possibility of future changes after a further review post-election.

"This shows just how important it is to build up an adequate workplace or private pension, to give yourselves options in later life, including when to retire," he added.

Indeed, Selby warned that if life expectancy growth returns by the next review, the next administration will likely be left "grappling with this thorny issue once again".

These concerns were shared by Phoenix Insights director, Catherine Foot, who argued that the government is "kicking the decision into the long grass".

"As huge numbers of our ageing population reach state pension age, it’s likely the acceleration will still be necessary for the long-term sustainability of public finances," she added.

"Passing the buck until after the election could postpone implementing policies that address the real issues of work and health which cause many on low incomes to fall out work years before their state pension age, and with little private wealth to support their income."

Adding to this, Quilter head of retirement policy, Jon Greer, noted that current forecasts suggest that the number of people over state pension age will grow significantly over the next 20 years whilst the proportion of the working age population to support them will start to fall.

“The delay to increasing the age therefore does put the state pension’s long-term sustainability into the spotlight and this could be the government simply kicking an inevitability down the road for the next party to take government to deal with," he stated.

"Overall the government aspire to aim for ‘up to 32 per cent’ in the long run as the right proportion of adult life to spend in receipt of the state pension. As a compromise if they choose not to raise the age then it does not leave the government with many levers it can pull."

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